Council Plans for the Future Amid Toughest Financial Outlook Since Launch of Austerity: What York Residents Can Expect

Ever feel like your household budget is being squeezed from all sides? The price of everything seems to be going up, but the money coming in stays stubbornly the same. Well, it turns out councils are in a similar boat. On 19 January 2026, the City of York Council laid out its game plan for the next year, and it’s all about navigating some seriously choppy financial waters. The council has published its budget proposals for 2026/27, which is basically its big plan for how it will spend money on everything from libraries and bin collections to looking after vulnerable people.

So, what’s causing the cash crunch?

It’s not just one thing, but a mix of pressures that have been building for a while. Think of it as a perfect storm. Firstly, rising inflation means the cost of running services is much higher. Secondly, there’s been what the council calls "decades of underfunding," meaning less money has been coming from the central government. And thirdly, the demand for services, especially complex ones, is on the rise. This isn't a problem unique to York; local authorities all over the country are facing the same headaches.

A big part of this increased demand comes from York’s changing population. The city has an ageing population, which is a wonderful thing in many ways, but it also means there’s a greater need for support. As people get older, they sometimes require more help with their health and daily living. This leads to a huge increase in the demand for social care, particularly adult social care. When local health services are under pressure, it often falls to the council to pick up the slack, putting even more strain on its budget. This challenge around adult social care is a top priority for the council.

To make matters even trickier, a national review of how funding is shared out, called the Fair Funding Review, is expected to leave York as the lowest-funded authority of its type in England by 2029. Because York has historically had lower council tax rates and is seen as less deprived than other areas, it gets a smaller slice of the national pie. This formula doesn’t always account for the real hardship some residents face, creating a tough situation for the council to manage.

Getting the balance right

With less money and more to do, the City of York Council has to make some difficult choices. The goal isn't just to cut costs but to find smarter, more efficient ways of working. The council has already made improvements and found efficiencies in Children’s Services and is now working hard to do the same for adult social care. Of course, the budget also needs to cover all the other things that keep the city running, like clean streets, reliable transport, and supporting the local economy through investment in jobs and homes.

Councillor Claire Douglas, the Leader of City of York Council, explained the thinking behind the plans. She emphasised that the proposed budget has to be about more than just numbers on a spreadsheet.

“Our budget must go beyond simply balancing the books — it must ensure the council is supporting those in most need, operating more efficiently and planning for the future needs of all our citizens and businesses. It must also explore all opportunities to raise income, in line with what residents told us in our previous budget consultation.

“The council will continue to deliver its Council Plan priorities, including on housing, the economy, improving transport and tackling cost of living challenges, while ensuring we focus on important, everyday services. This budget, while incredibly difficult, achieves the right balance for our city”.

This approach shows that the core priorities of the Council Plan, like helping people with the cost of living challenges, are still front and centre. It's about finding a way to deliver for both residents and local businesses despite the tough financial climate, a remnant of long-term austerity.

What does this mean for you?

While the word 'budget' can sound a bit dry, these proposals include some tangible investments that people in York will actually see and feel. It’s not all about belt-tightening. The proposed budget sets aside almost £400k for one-off investment projects in 2026-27. Here are some of the highlights:

• Neighbourhood Caretakers: Following a successful start, this team is getting a budget boost to do even more work in local communities.

• Weed Control: The contract for keeping weeds under control is being brought in-house. This gives the council more control to improve the service and make sure it’s done properly.

• Community Fun: A pot of £50k is being set aside to support community activities and events across the city.

• Better Biking: For the cyclists out there, the city is set to get a big boost in cycle parking, with around 250 new hoops planned.

A tough road ahead

Nobody is pretending this is easy. The financial situation for councils is expected to get even tougher in the coming years. That's why strong financial management is so important right now. The council is focusing its limited resources on those who need it most, especially in social care.

Councillor Katie Lomas, the Executive Member for Finance, Performance, Major Projects and Equalities, didn't mince her words about the challenge.

“This budget is extremely challenging, and the national funding settlement means future years will be even tougher. With limited resources, we have focussed spend to those in most need, such as adults with care needs.

“With strong financial management and a firm control on our costs, we have the best chance of balancing the council’s budget in 2026-27, while continuing to deliver those important day to day services our residents expect and really value”.

The budget proposals are now up for discussion. They will be presented at the Council’s Executive meeting on Thursday 27 January, before a final vote is taken at a Full Council meeting on Thursday 12 February. This is where the final decisions will be made on a plan that will affect every resident in the city.